Business Law Unit 2 Milestone Sophia
Business Law Unit 2 Milestone Sophia
1
A red car crashes into a blue car at night on a dark road. The driver of the blue car sues the other driver for negligence.
Assuming it is true, which of the following would represent a strong defense against the negligence claim?
•
The red car was rushing to the scene of another accident to provide medical care.
•
Both drivers assumed the increased risk associated with driving at night.
•
The driver of the blue car was drunk and driving erratically, which caused the accident.
•
Neither driver was wearing a seatbelt.
Negligent Torts: Damages and Defenses
2
Cynthia orders 100 shirts in a variety of colors for her screenprinting business from Juan, a shirt supplier. Before Juan ships the shirts, he discovers through conversations with other shirt suppliers that Cynthia is insolvent and is unlikely to pay for the shirts upon their delivery.
What remedy does Juan have in this scenario?
•
Juan has 10 days to determine whether or not Cynthia is actually insolvent, at which point he must ship the shirts or cancel the contract.
•
Juan must ship the shirts regardless; otherwise, he will be in breach of contract.
•
Juan has no recourse in this scenario, since Cynthia is insolvent.
•
Juan may refuse to deliver the shirts unless Cynthia pays in cash ahead of delivery.
Seller’s Remedies Under the Uniform Commercial Code
3
Tort law is similar to criminal law in that __________.
•
they both have primarily developed in common law courts
•
they both require a wrongful act by a defendant for the plaintiff to recover
•
they both require specific intent on the part of the defendant
•
they both require specific intent on the part of the plaintiff
Introduction to Tort Law
4
An example of foreseeable damages from a faulty repair of your car that led to an accident would be __________.
•
your loss of one year’s wages from a job, since you were fired that day for being late after the accident
•
your loss of a winning lottery ticket that blew away in the wind during the accident
•
additional hotel and travel charges that you incurred, because you missed your flight that day as a result of the accident
•
the cost to repair your vehicle, as well as all damage to other vehicles involved in the accident
Limitations on Contract Remedies
5
A 60-year-old man develops lung cancer, and sues the manufacturer of an asbestos-containing material. The man worked in construction for 45 years, and often used the asbestos-containing material in building projects. He believes that the asbestos-containing material was unreasonably unsafe, because friends of his in the construction trade who used alternative materials did not develop lung cancer.
How strong is the negligence case against the product manufacturer?
•
Strong, because the alternative materials used by his friends were much safer.
•
Weak, because the manufacturer can claim preemption.
•
Strong, because the manufacturer failed to warn users of the potential dangers of asbestos.
•
Weak, because proximate cause is difficult to prove in the absence of other, similarly-affected individuals.
Negligent Products Liability
6
A laundry detergent company advertises that its new product can remove any stain from clothes in just one wash, although company testing has shown that it oftentimes takes two or three washes for a stain to disappear.
Which type of intentional tort does this represent?
•
Tortious interference with contract
•
Defamation
•
Misrepresentation
•
This action does not rise to the level of an intentional tort.
Intentional Torts
7
Select the example that is inconsistent with the provisions of the UCC for contract remedies for a seller’s breach of contract.
•
An appliance company sells a defective stove that injures its owner. The sales contract excludes responsibility for consequential damages except those deemed unconscionable, so the company replaces the stove and compensates the woman for her injury.
•
In its sales contract, a software company specifies that its sole obligation in the event that its software is defective is to replace it with a non-defective copy.
•
In order to be more competitive with buyers, the sales contract for a television manufacturer extends the statute of limitations for breach of contract claims to six years.
•
The sales contract for a shoe company specifies that the statute of limitations for any charges of breach of contract shall be limited to two years.
Remedies in General Under the Uniform Commercial Code
8
Heidi purchases an original work by one of her favorite sculptors from an art dealer for $8,000. When the sculpture is delivered, Heidi has it inspected by an art appraiser, who informs her that the sculpture is a fake. When Heidi calls the art dealer to tell him the news, he is honestly shocked and appalled.
What remedy does Heidi have in this scenario?
•
Heidi is entitled to recover the purchase price of the sculpture, as well as the money she spent to have the sculpture appraised.
•
Heidi has no recourse in this scenario, because she accepted delivery of a non-conforming good.
•
Heidi is only entitled to recover the money that she paid for the sculpture.
•
Heidi may sue the art dealer for specific performance and require the dealer to secure the original sculpture in any way possible.
Buyer’s Remedies Under the Uniform Commercial Code
9
A driver is texting and runs into a pedestrian crossing the road at a crosswalk. The pedestrian suffers a broken leg and is rushed to the hospital.
Is the driver liable for negligence if the pedestrian sues?
•
No, because it would be difficult to prove that the driver’s texting was the proximate cause of the pedestrian’s broken leg.
•
Yes, because the driver broke the law by texting while driving.
•
No, because even though the driver was texting while driving, the pedestrian had a duty to look out for possible dangers before entering the crosswalk.
•
Yes, because the driver had a duty of care which was breached by texting while driving, and the pedestrian had legally recognizable injuries directly resulting from that breach.
Negligent Torts: Liability
10
Christine hires a deck company to build a deck. The company initially does a terrible job and agrees to rebuild it. A court requires the company to pay for the cost of the inspection that Christine has done to ensure the rebuilt deck is structurally sound.
This is an example of which type of monetary award?
•
Nominal damages
•
Incidental damages
•
Consequential damages
•
Punitive damages
Monetary Awards
11
In most cases, an enforceable contract has to include consideration, which __________.
•
is defined as an offer extended from one party to the other
•
must be morally or economically adequate to make the bargain a fair one
•
means that both parties have full mental capacity to form an agreement
•
must be an exchange of legal value between the parties to the agreement
Contract Formation
12
Which of the following scenarios would likely result in an order for specific performance or an injunction, rather than a monetary award?
•
Yolanda’s landscaping company orders a new riding mower that is supposed to be delivered before Yolanda’s next big job on Monday. The mower doesn’t arrive until Friday, so Yolanda loses out on that job. Yolanda sues the company that promised her the riding mower for breach of contract.
•
A homeowner requests that a fencing company install a particular brand of vinyl fence. The company ends up installing a different brand that looks and performs exactly the same. The homeowner sues for breach of contract.
•
Joyce signs a contract to purchase her first home for $180,000 from Mei. Mei then gets a better offer, and breaks her contract with Joyce. Joyce sues Mei for breach of contract.
•
A hospital hires a new CEO who signs a two-year employment contract. After six months, the CEO quits, and the hospital sues her for breach of contract.
Equitable Remedies: Specific Performance and Injunction
13
Select the true statement about the Convention on Contracts for the International Sale of Goods (CISG).
•
It governs international sales contracts for all countries in the world.
•
It governs the international sale of services in addition to goods.
•
Its purpose is to unify contract law among countries to facilitate international trade.
•
Parties to the Convention must re-approve the treaty every five years.
Sources of Contract Law
14
Which contract generally must be in writing under the Statute of Frauds?
•
Nora accepts a job working for a local nonprofit agency.
•
Alejandro purchases part of his neighbor’s fields to expand his growing capacity.
•
Jamal agrees to dog-sit for his neighbor for the weekend.
•
Robert buys a used computer from a store for $400.
Statute of Frauds
15
A manufacturer of kitchen knives is sued for strict product liability by Jack, who cut himself with one of the knives and suffered permanent nerve damage and paralysis in three fingers on his left hand. Jack argues that the knives were overly sharp and, thus, defective in their manufacturing. The manufacturer defends against the claim by arguing that the risk to the consumer is outweighed by the utility of the knives.
How does Jack’s claim stand up to the manufacturer’s defense?
•
Jack is likely to win, unless the manufacturer can prove that Jack was misusing or abusing the knife in some way.
•
Jack is likely to lose, because the knife is clearly safe for its intended use.
•
Jack is likely to lose, because the knife cannot function for its intended purpose unless it is sharp, and the risk to consumers is more than outweighed by the utility of a sharp kitchen knife.
•
Jack is likely to win, because the risk-utility test is only applicable to strict product liability claims involving pharmaceuticals.
Problems with Strict Products Liability
16
In which scenario would strict liability most likely apply?
•
A dishwasher fails to fully clean the dishes.
•
A car’s radio sometimes stops working.
•
A lightbulb burns out prematurely.
•
An airplane’s brakes fail in freezing weather.
Strict Liability
17
Select the statement that is true of consumer law prior to the 20th century.
•
Its central tenet was “seller beware.”
•
It relied primarily on the threat of litigation to ensure product safety.
•
It essentially functioned in the same way as current products liability law.
•
It was rooted in the fact that consumers had much more direct contact with producers than they do now.
Products Liability
18
Which of the following conditions always renders a contract voidable?
•
If a party to the contract fraudulently misrepresents material facts
•
If a party to the contract is in good mental health but misunderstands the terms of the contract
•
If a party to the contract can no longer afford the promised consideration
•
If a party to the contract has changed his or her mind
Unenforceable Contracts
19
A manufacturer of a disposable butane lighter is sued for the wrongful death of two adults and a child under strict products liability law when the family’s house burned down as a result of the six-year-old child setting bed clothes on fire using the manufacturer’s butane lighter. The allegation against the manufacturer is based on the theory that the lighter was defective because it did not have a childproof device to prevent children from igniting the lighter. This butane lighter had the words: “Keep Out of Reach of Children” written on the outside of the lighter body.
How strong of a case does the family’s estate have in its strict product liability lawsuit against the manufacturer based on the lighter being a defective product?
•
Strong, because the product only contained a warning to keep the lighter away from children, but did not provide a childproofing mechanism.
•
Strong, because lighters are unavoidably unsafe.
•
Weak, because it would be difficult to prove with certainty that the lighter was the cause of the fire.
•
Weak, because there was no evidence that the product was unreasonably dangerous in normal use.
Strict Products Liability
20
Contracts function as a symbol of __________ in modern society.
•
wealth
•
disorder
•
free will
•
oppression
General Perspectives on Contracts
21
You and I verbally agree that you will buy my bicycle for $200.
This is a(n) __________.
•
unilateral contract
•
implied contract
•
express contract
•
quasi-contract
1
A red car crashes into a blue car at night on a dark road. The driver of the blue car sues the other driver for negligence.
Assuming it is true, which of the following would represent a strong defense against the negligence claim?
•
The red car was rushing to the scene of another accident to provide medical care.
•
The driver of the blue car was drunk and driving erratically, which caused the accident.
•
Neither driver was wearing a seatbelt.
•
Both drivers assumed the increased risk associated with driving at night.
Negligent Torts: Damages and Defenses
2
Which of the following scenarios would likely result in an order for specific performance or an injunction, rather than a monetary award?
•
When a tree removal service comes to Amanda’s house to cut down several trees, it ends up damaging the roof of her garage. The company refunds the tree work but refuses to pay to repair her garage. Amanda sues the company for breach of contract.
•
Hannah agrees to sell her used nursery furniture to her friend, Melissa. Several months pass and it seems clear that Hannah will not follow through on the contract, so Melissa sues her for breach of contract.
•
Paul and Jordan hire a pool company to install a new pool in their backyard. When the pool is complete, it’s clear the company did a poor job, and chlorine water is leaking out of the pool and killing their grass. Paul and Jordan sue the pool company for breach of contract.
•
Fortuna owns a painting done by a famous artist, and she agrees to sell it to Langston for a significant sum of money. Later, Fortuna changes her mind and refuses to part with the painting. Langston sues Fortuna for breach of contract.
Equitable Remedies: Specific Performance and Injunction
3
To be enforceable, a contract typically must __________.
•
have mutual assent, legal value exchanged by both parties, legal capacity of both parties, and be for a legal purpose
•
have mutual assent, legal value exchanged by both parties, and be entered into in good faith
•
have mutual assent and legal capacity of both parties, and be in written form
•
have assent and consideration from at least one party, and have legal capacity and purpose from both parties
Contract Formation
4
You and I verbally agree that you will buy my bicycle for $200.
This is a(n) __________.
•
unilateral contract
•
quasi-contract
•
express contract
•
implied contract
Different Types of Contracts
5
Heidi purchases an original work by one of her favorite sculptors from an art dealer for $8,000. When the sculpture is delivered, Heidi has it inspected by an art appraiser, who informs her that the sculpture is a fake. When Heidi calls the art dealer to tell him the news, he is honestly shocked and appalled.
What remedy does Heidi have in this scenario?
•
Heidi may sue the art dealer for specific performance and require the dealer to secure the original sculpture in any way possible.
•
Heidi has no recourse in this scenario, because she accepted delivery of a non-conforming good.
•
Heidi is only entitled to recover the money that she paid for the sculpture.
•
Heidi is entitled to recover the purchase price of the sculpture, as well as the money she spent to have the sculpture appraised.
Buyer’s Remedies Under the Uniform Commercial Code
6
In which scenario would strict liability most likely apply?
•
A hardware company fails to label its nails as dangerous to ingest.
•
A tobacco company fails to put a cancer warning on its cartons of cigarettes.
•
A baseball manufacturer fails to put an impact warning on its baseballs.
•
A scissor company fails to label its scissors as sharp.
Strict Liability
7
Cynthia orders 100 shirts in a variety of colors for her screenprinting business from Juan, a shirt supplier. Before Juan ships the shirts, he discovers through conversations with other shirt suppliers that Cynthia is insolvent and is unlikely to pay for the shirts upon their delivery.
What remedy does Juan have in this scenario?
•
Juan has no recourse in this scenario, since Cynthia is insolvent.
•
Juan has 10 days to determine whether or not Cynthia is actually insolvent, at which point he must ship the shirts or cancel the contract.
•
Juan may refuse to deliver the shirts unless Cynthia pays in cash ahead of delivery.
•
Juan must ship the shirts regardless; otherwise, he will be in breach of contract.
Seller’s Remedies Under the Uniform Commercial Code
8
Which contract generally must be in writing under the Statute of Frauds?
•
Nora accepts a job working for a local nonprofit agency.
•
Alejandro purchases part of his neighbor’s fields to expand his growing capacity.
•
Jamal agrees to dog-sit for his neighbor for the weekend.
•
Robert buys a used computer from a store for $400.
Statute of Frauds
9
A manufacturer marketed a new mascara that initial testing revealed could cause an allergic reaction in a small number of people. One of the people found to have this allergic reaction in initial testing suffered significant loss of vision in one eye as a result. When the mascara was released on the market, the manufacturer included a warning of the possibility of an allergic reaction, but did not provide the consumer with any way to test for the allergy and made no mention of the possibility of this allergic reaction causing loss of vision. Joan purchased the new mascara from a local drug store and suffered an allergic reaction to the mascara that caused a 90% loss of vision in her right eye.
How strong of a case does Joan have against the manufacturer for strict product liability?
•
Strong, because the warning by the manufacturer was inadequate, since the risk of harm was foreseeable and could have been reduced by providing a way of testing for the allergic reaction and informing consumers of the potential of vision loss.
•
Weak, because the manufacturer is not engaged in the business of selling and is therefore not subject to Section 402A of the Restatement of Torts (Second). However, Joan could sue the local drug store.
•
Weak, because the manufacturer met its duty to warn by informing consumers that the product could cause an allergic reaction, and therefore users of the mascara assumed the risk.
•
Strong, because the manufacturer was clearly negligent by releasing a product to market that could cause an allergic reaction in anyone.
Strict Products Liability
10
A 60-year-old man develops lung cancer, and sues the manufacturer of an asbestos-containing material. The man worked in construction for 45 years, and often used the asbestos-containing material in building projects. He believes that the asbestos-containing material was unreasonably unsafe, because friends of his in the construction trade who used alternative materials did not develop lung cancer.
How strong is the negligence case against the product manufacturer?
•
Strong, because the manufacturer failed to warn users of the potential dangers of asbestos.
•
Weak, because proximate cause is difficult to prove in the absence of other, similarly-affected individuals.
•
Weak, because the manufacturer can claim preemption.
•
Strong, because the alternative materials used by his friends were much safer.
Negligent Products Liability
11
An adult climbs over a fence onto a neighbor’s property and falls into the pool, which is also surrounded by a fence.
Assuming the adult is injured in a legally recognizable way, is the neighbor liable for negligence if the adult then sues?
•
Yes, because homeowners have a duty of care to anyone on their property at all times, no matter the circumstances.
•
No, because the neighbor exercised a reasonable degree of care by fencing in her property and her pool.
•
No, because the adult was trespassing on his neighbor’s property.
•
Yes, because the adult had legally recognizable injuries.
Negligent Torts: Liability
12
The purpose of contracts is __________.
•
to eliminate any disagreement in economic exchanges
•
to bring order to medieval societies
•
to limit personal freedom
•
to facilitate economic transactions between individuals
General Perspectives on Contracts
13
In which scenario would the non-breaching party lose the opportunity to avoid or limit losses?
•
A car dealer finds a new buyer for an automobile that was previously under contract.
•
A cabinetmaker stops building cabinets for an order when he learns of his customer’s insolvency.
•
An art store stops selling paints once it discovers that its recent paint order contains defective materials.
•
An office supply store continues to ship printer paper to a business that it knows has closed.
Limitations on Contract Remedies
14
A manufacturer of kitchen knives is sued for strict product liability by Jack, who cut himself with one of the knives and suffered permanent nerve damage and paralysis in three fingers on his left hand. Jack argues that the knives were overly sharp and, thus, defective in their manufacturing. The manufacturer defends against the claim by arguing that the risk to the consumer is outweighed by the utility of the knives.
How does Jack’s claim stand up to the manufacturer’s defense?
•
Jack is likely to win, because the risk-utility test is only applicable to strict product liability claims involving pharmaceuticals.
•
Jack is likely to lose, because the knife is clearly safe for its intended use.
•
Jack is likely to lose, because the knife cannot function for its intended purpose unless it is sharp, and the risk to consumers is more than outweighed by the utility of a sharp kitchen knife.
•
Jack is likely to win, unless the manufacturer can prove that Jack was misusing or abusing the knife in some way.
Problems with Strict Products Liability
15
Which of the following conditions always renders a contract unenforceable?
•
If the contract is deemed to be unfair to one party
•
If a party to the contract is unable to fulfill the terms of the contract
•
If the contract is informal (i.e., verbal rather than written)
•
If a party to the contract is deemed incapacitated by intoxication or mental state
Unenforceable Contracts
16
A laundry detergent company advertises that its new product can remove any stain from clothes in just one wash, although company testing has shown that it oftentimes takes two or three washes for a stain to disappear.
Which type of intentional tort does this represent?
•
Misrepresentation
•
This action does not rise to the level of an intentional tort.
•
Defamation
•
Tortious interference with contract
Intentional Torts
17
The Uniform Commercial Code (UCC) is the primary source of law for contracts regarding __________.
•
the sale or lease of goods only
•
the sale of goods and services
•
the sale of goods, services, and real estate
•
the sale of goods and real estate
Sources of Contract Law
18
Select the example that is inconsistent with the provisions of the UCC for contract remedies for a seller’s breach of contract.
•
In its sales contract, a maker of musical instruments gives buyers a maximum of two years to raise any concerns relating to breach of contract.
•
The sales contract for a lumber mill that sells building materials includes a liquidated damages clause for the amount of $50 million in the event of a breach of contract.
•
The sales contract for a consumer electronics company excludes specific performance as a remedy for non-delivery of items ordered by the buyer, but it allows for refunds.
•
The sales contract for a swimming pool supply store allows for a single remedy for any contract breaches.
Remedies in General Under the Uniform Commercial Code
19
Malia signs a contract to purchase a used car. The seller breaches the contract, but Malia is able to buy the exact same car from another dealer at a better price. Malia sues the original seller and is awarded $2.
This is an example of which type of monetary award?
•
Nominal damages
•
Incidental damages
•
Punitive damages
•
Restitution
Monetary Awards
20
Select the statement that is true of current products liability law, rather than consumer law prior to the 20th century.
•
It assumes that most commerce is local.
•
It rests on the principle of “buyer beware.”
•
It is an important way of ensuring consumer product safety.
•
It is rarely applied, as most consumer products are extremely safe.
Products Liability
21
Tort law is similar to criminal law in that __________.
•
they both require a wrongful act by a defendant for the plaintiff to recover
•
they both require specific intent on the part of the plaintiff
•
they both have primarily developed in common law courts
•
they both require specific intent on the part of the defendant
1
Select the example that is inconsistent with the provisions of the UCC for contract remedies for a seller’s breach of contract.
•
In order to be more competitive with buyers, the sales contract for a television manufacturer extends the statute of limitations for breach of contract claims to six years.
•
The sales contract for a shoe company specifies that the statute of limitations for any charges of breach of contract shall be limited to two years.
•
An appliance company sells a defective stove that injures its owner. The sales contract excludes responsibility for consequential damages except those deemed unconscionable, so the company replaces the stove and compensates the woman for her injury.
•
In its sales contract, a software company specifies that its sole obligation in the event that its software is defective is to replace it with a non-defective copy.
Remedies in General Under the Uniform Commercial Code
2
A children’s highchair is recalled after numerous reports emerge of children slipping out of the safety restraint and falling to the floor, injuring themselves. The product has a label that warns parents to strap children in while they are sitting in the highchair. Several parents sue for negligence.
How strong is their negligence case against the product manufacturer?
•
Weak, because proximate cause is difficult to establish.
•
Weak, because parents can’t expect children to sit still in a highchair.
•
Strong, because the highchair clearly has a defective design that makes it unsafe.
•
Strong, because the highchair’s manufacturer failed to warn users of its potential dangers.
Negligent Products Liability
3
In which scenario would strict liability most likely apply?
•
A car’s radio sometimes stops working.
•
A lightbulb burns out prematurely.
•
A dishwasher fails to fully clean the dishes.
•
An airplane’s brakes fail in freezing weather.
Strict Liability
4
You and I verbally agree that you will buy my bicycle for $200.
This is a(n) __________.
•
express contract
•
quasi-contract
•
implied contract
•
unilateral contract
Different Types of Contracts
5
Which of the following scenarios would likely result in an order for specific performance or an injunction, rather than a monetary award?
•
When a tree removal service comes to Amanda’s house to cut down several trees, it ends up damaging the roof of her garage. The company refunds the tree work but refuses to pay to repair her garage. Amanda sues the company for breach of contract.
•
Hannah agrees to sell her used nursery furniture to her friend, Melissa. Several months pass and it seems clear that Hannah will not follow through on the contract, so Melissa sues her for breach of contract.
•
Fortuna owns a painting done by a famous artist, and she agrees to sell it to Langston for a significant sum of money. Later, Fortuna changes her mind and refuses to part with the painting. Langston sues Fortuna for breach of contract.
•
Paul and Jordan hire a pool company to install a new pool in their backyard. When the pool is complete, it’s clear the company did a poor job, and chlorine water is leaking out of the pool and killing their grass. Paul and Jordan sue the pool company for breach of contract.
Equitable Remedies: Specific Performance and Injunction
6
A manufacturer of kitchen knives is sued for strict product liability by Jack, who cut himself with one of the knives and suffered permanent nerve damage and paralysis in three fingers on his left hand. Jack argues that the knives were overly sharp and, thus, defective in their manufacturing. The manufacturer defends against the claim by arguing that the risk to the consumer is outweighed by the utility of the knives.
How does Jack’s claim stand up to the manufacturer’s defense?
•
Jack is likely to win, unless the manufacturer can prove that Jack was misusing or abusing the knife in some way.
•
Jack is likely to lose, because the knife is clearly safe for its intended use.
•
Jack is likely to lose, because the knife cannot function for its intended purpose unless it is sharp, and the risk to consumers is more than outweighed by the utility of a sharp kitchen knife.
•
Jack is likely to win, because the risk-utility test is only applicable to strict product liability claims involving pharmaceuticals.
Problems with Strict Products Liability
7
A man riding a roller coaster is severely injured when the car he’s riding in jumps off the track. He sues the amusement park for negligence.
Assuming it is true, which of the following would represent a strong defense against the negligence claim?
•
The man has seen roller coasters before, and knowingly and voluntarily assumed the risk of participating in a dangerous activity.
•
The amusement park has never had an accident like this before.
•
The man undid his seatbelt after the roller coaster started moving.
•
The man snuck into the amusement park rather than paying for admission.
Negligent Torts: Damages and Defenses
8
Select the statement that is true of consumer law prior to the 20th century.
•
It was rooted in the fact that consumers had much more direct contact with producers than they do now.
•
Its central tenet was “seller beware.”
•
It essentially functioned in the same way as current products liability law.
•
It relied primarily on the threat of litigation to ensure product safety.
Products Liability
9
Cynthia orders 100 shirts in a variety of colors for her screenprinting business from Juan, a shirt supplier. After Juan ships the shirts, Cynthia calls him to inform him of her insolvency. The box of shirts is currently in transit and will be delivered by the postal service tomorrow.
What remedy does Juan have in this scenario?
•
Juan may stop delivery of the box by the post service, upon which time he may pursue a variety of remedies to recover his damages.
•
Juan may recover the contracted price of the shirts from Cynthia, and then he may resell the shirts to another buyer with no restrictions.
•
Juan may not stop delivery of the box by the postal service, but he may recover the funds owed to him by Cynthia.
•
Juan has no recourse in this scenario, since Cynthia is insolvent.
Seller’s Remedies Under the Uniform Commercial Code
10
In which scenario would the non-breaching party lose the opportunity to avoid or limit losses?
•
An art store stops selling paints once it discovers that its recent paint order contains defective materials.
•
A cabinetmaker stops building cabinets for an order when he learns of his customer’s insolvency.
•
A car dealer finds a new buyer for an automobile that was previously under contract.
•
An office supply store continues to ship printer paper to a business that it knows has closed.
Limitations on Contract Remedies
11
Malia signs a contract to purchase a used car. The seller breaches the contract, but Malia is able to buy the exact same car from another dealer at a better price. Malia sues the original seller and is awarded $2.
This is an example of which type of monetary award?
•
Nominal damages
•
Restitution
•
Incidental damages
•
Punitive damages
Monetary Awards
12
Which of the following conditions always renders a contract unenforceable?
•
If a party to the contract is deemed incapacitated by intoxication or mental state
•
If the contract is informal (i.e., verbal rather than written)
•
If the contract is deemed to be unfair to one party
•
If a party to the contract is unable to fulfill the terms of the contract
Unenforceable Contracts
13
Under contract law, a promise not to do something that a person could otherwise do __________.
•
is only deemed legal consideration for a contract if the person giving it is financially harmed
•
is called a forbearance, but is not adequate legal consideration for a contract
•
is called promissory estoppel, and qualifies as legal consideration
•
is called a forbearance and is an adequate legal value to support the existence of consideration for a contract
Contract Formation
14
Contracts allow a free society to __________.
•
plan an orderly progression to capitalism
•
ensure economic equality among its members
•
engage in efficient economic exchanges
•
do away with the need for law
General Perspectives on Contracts
15
Tort law is similar to criminal law in that __________.
•
they both require specific intent on the part of the plaintiff
•
they both require specific intent on the part of the defendant
•
they both have primarily developed in common law courts
•
they both require a wrongful act by a defendant for the plaintiff to recover
Introduction to Tort Law
16
A manufacturer of a disposable butane lighter is sued for the wrongful death of two adults and a child under strict products liability law when the family’s house burned down as a result of the six-year-old child setting bed clothes on fire using the manufacturer’s butane lighter. The allegation against the manufacturer is based on the theory that the lighter was defective because it did not have a childproof device to prevent children from igniting the lighter. This butane lighter had the words: “Keep Out of Reach of Children” written on the outside of the lighter body.
How strong of a case does the family’s estate have in its strict product liability lawsuit against the manufacturer based on the lighter being a defective product?
•
Weak, because there was no evidence that the product was unreasonably dangerous in normal use.
•
Strong, because lighters are unavoidably unsafe.
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Strong, because the product only contained a warning to keep the lighter away from children, but did not provide a childproofing mechanism.
•
Weak, because it would be difficult to prove with certainty that the lighter was the cause of the fire.
Strict Products Liability
17
An adult climbs over a fence onto a neighbor’s property and falls into the pool, which is also surrounded by a fence.
Assuming the adult is injured in a legally recognizable way, is the neighbor liable for negligence if the adult then sues?
•
No, because the adult was trespassing on his neighbor’s property.
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Yes, because homeowners have a duty of care to anyone on their property at all times, no matter the circumstances.
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Yes, because the adult had legally recognizable injuries.
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No, because the neighbor exercised a reasonable degree of care by fencing in her property and her pool.
Negligent Torts: Liability
18
Which contract generally must be in writing under the Statute of Frauds?
•
Shara and Asher form a prenuptial agreement before they get married.
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Colin hires a contractor to remove several trees from his property next month.
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Hilary hires a personal assistant to help with her catering business.
•
George loans his daughter $300 to buy a new bicycle.
Statute of Frauds
19
Select the true statement about the Convention on Contracts for the International Sale of Goods (CISG).
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It governs the international sale of services in addition to goods.
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It governs international sales contracts for all countries in the world.
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Parties to the Convention must re-approve the treaty every five years.
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Its purpose is to unify contract law among countries to facilitate international trade.
Sources of Contract Law
20
Heidi purchases an original work by one of her favorite sculptors from an art dealer for $8,000. When the sculpture is delivered, Heidi has it inspected by an art appraiser, who informs her that the sculpture is a fake. When Heidi calls the art dealer to tell him the news, he is honestly shocked and appalled.
What remedy does Heidi have in this scenario?
•
Heidi is entitled to recover the purchase price of the sculpture, as well as the money she spent to have the sculpture appraised.
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Heidi has no recourse in this scenario, because she accepted delivery of a non-conforming good.
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Heidi is only entitled to recover the money that she paid for the sculpture.
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Heidi may sue the art dealer for specific performance and require the dealer to secure the original sculpture in any way possible.
Buyer’s Remedies Under the Uniform Commercial Code
21
A laundry detergent company advertises that its new product can remove any stain from clothes in just one wash, although company testing has shown that it oftentimes takes two or three washes for a stain to disappear.
Which type of intentional tort does this represent?
•
Misrepresentation
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Tortious interference with contract
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Defamation
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This action does not rise to the level of an intentional tort.
1
A firefighter is injured by smoke inhalation while fighting an accidental fire at a local resident’s house.
Is the homeowner liable for negligence if the firefighter sues?
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No, because the firefighter was acting unreasonably by entering a burning home.
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Yes, but only if causation can be established.
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Yes, because the homeowner breached a duty of reasonable care to the firefighter.
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No, because the homeowner had no duty of care to the firefighter.
Negligent Torts: Liability
2
Select the example that is inconsistent with the provisions of the UCC for contract remedies for a seller’s breach of contract.
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The sales contract for a swimming pool supply store allows for a single remedy for any contract breaches.
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The sales contract for a lumber mill that sells building materials includes a liquidated damages clause for the amount of $50 million in the event of a breach of contract.
•
The sales contract for a consumer electronics company excludes specific performance as a remedy for non-delivery of items ordered by the buyer, but it allows for refunds.
•
In its sales contract, a maker of musical instruments gives buyers a maximum of two years to raise any concerns relating to breach of contract.
Remedies in General Under the Uniform Commercial Code
3
Cynthia orders 100 shirts in a variety of colors for her screenprinting business from Juan, a shirt supplier. Before Juan ships the shirts, Cynthia calls him to inform him that she is going out of business and no longer needs the shirts. Juan decides to resell the 100 shirts at public auction.
What further remedy does Juan have in this scenario?
•
Juan may sell the shirts at public auction without notifying Cynthia, since she is in breach of contract.
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If Cynthia becomes aware of the public auction, Juan may refuse to allow Cynthia to bid on the shirts since she is in breach of contract.
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If Juan sells the shirts at auction for more that the original contract price, he is obligated to share the profits, less any incidental costs, with Cynthia.
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Since Juan is reselling the shirts at public auction and they are not a perishable good, he must notify Cynthia of the public sale and allow her to bid if she wishes.
Seller’s Remedies Under the Uniform Commercial Code
4
To be enforceable, a contract typically must __________.
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have mutual assent, legal value exchanged by both parties, legal capacity of both parties, and be for a legal purpose
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have mutual assent, legal value exchanged by both parties, and be entered into in good faith
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have mutual assent and legal capacity of both parties, and be in written form
•
have assent and consideration from at least one party, and have legal capacity and purpose from both parties
Contract Formation
5
Which of the following conditions always renders a contract unenforceable?
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If a party to the contract is unable to fulfill the terms of the contract
•
If the contract is deemed to be unfair to one party
•
If a party to the contract is deemed incapacitated by intoxication or mental state
•
If the contract is informal (i.e., verbal rather than written)
Unenforceable Contracts
6
A manufacturer of a portable circular saw is sued by Dennis, who, while using the saw, put it down on the ground in front of him after it was shut off but while the blade was still turning. The still-circulating saw creeped across the floor, causing significant personal injury to Dennis’ foot. Dennis sued the manufacturer for defective design of the circular saw based on it not having a brake mechanism or a retractable cover for the blade once the saw was turned off.
How strong of a case does Dennis have in his strict liability lawsuit against the manufacturer based on the defective design of the circular saw?
•
Weak, because there is no evidence that the saw was unreasonably dangerous in normal use.
•
Strong, because the saw was unreasonably dangerous under circumstances that would be foreseeable as normal use by a consumer.
•
Strong, but only if Dennis can prove that the saw was less safe when turned off than other saws on the market.
•
Weak, because Dennis assumed the risk of injury when he chose to use a circular saw, which is known to be dangerous.
Strict Products Liability
7
In which scenario would the non-breaching party lose the opportunity to avoid or limit losses?
•
An office supply store continues to ship printer paper to a business that it knows has closed.
•
A car dealer finds a new buyer for an automobile that was previously under contract.
•
An art store stops selling paints once it discovers that its recent paint order contains defective materials.
•
A cabinetmaker stops building cabinets for an order when he learns of his customer’s insolvency.
Limitations on Contract Remedies
8
Select the statement that is true of consumer law prior to the 20th century.
•
It was more important than it is now, because consumer products were less sophisticated.
•
It forced sellers to take financial responsibility for any defects in products they sold.
•
The burden of responsibility generally rested on the buyer.
•
It incorporated the s of express and implied warranties.
Products Liability
9
In which scenario would strict liability most likely apply?
•
A tobacco company fails to put a cancer warning on its cartons of cigarettes.
•
A baseball manufacturer fails to put an impact warning on its baseballs.
•
A scissor company fails to label its scissors as sharp.
•
A hardware company fails to label its nails as dangerous to ingest.
Strict Liability
10
Contracts allow a free society to __________.
•
engage in efficient economic exchanges
•
do away with the need for law
•
plan an orderly progression to capitalism
•
ensure economic equality among its members
General Perspectives on Contracts
11
A manufacturer of an electric meter that included surge protectors to prevent damage to the meter from overloads is sued exclusively for strict product liability by an electric company after the surge protectors failed and damaged the electric meters. The manufacturer defends the claim of strict product liability on the basis that the defect in the product only damaged the product itself and there were no personal injuries.
How strong is this defense by the manufacturer?
•
Weak, because strict product liability applies to defective products even when they do not cause personal injuries or damage a company’s property.
•
Strong, unless the electric company can provide a reasonable alternative design to the meter that would have mitigated the risk of the surge protectors failing.
•
Weak, because there is no indication that the electric company was aware of the product’s defective surge protectors and elected to use the meters anyway.
•
Strong, because strict product liability does not allow for economic loss occasioned from a defect in a product that only causes damage to the product itself.
Problems with Strict Products Liability
12
Regarding fault, tort law is different from criminal law in that __________.
•
under tort law, a tortfeasor may only be held liable if he or she did not observe all possible precautions
•
under tort law, a plaintiff may recover only if the defendant had a deliberate desire to do harm
•
under tort law, a plaintiff may only recover if a wrongful act has been committed by the defendant
•
under tort law, a plaintiff may recover even if the tortfeasor is not involved in intentionally wrongful conduct
Introduction to Tort Law
13
A disgruntled employee writes a letter to the local newspaper that contains harmful lies about his employer. The letter is published in Monday’s edition of the newspaper.
Which type of intentional tort does this represent?
•
Misrepresentation
•
This action does not rise to the level of an intentional tort.
•
Intentional infliction of emotional distress
•
Defamation
Intentional Torts
14
Which contract generally must be in writing under the Statute of Frauds?
•
Neesa agrees to co-sign a loan for her daughter to pay for college tuition.
•
Finn agrees to buy a watch from a friend for $300.
•
Harlow agrees to pay $50 to anyone who can help her find her lost dog.
•
Miguel agrees to replace his neighbor’s roof in three months for $15,000.
Statute of Frauds
15
Zahra and Joseph sign a contract worth $1,000. When Zahra breaks the contract, Joseph loses the $1,000.
Which type of monetary award does Joseph receive if he is later awarded $1,000?
•
Nominal damages
•
Incidental damages
•
Compensatory damages
•
Restitution
Monetary Awards
16
Last September, you and I discussed you cutting my lawn this summer for $50 per week. This June, you began cutting my lawn every week.
We have a(n) __________.
•
express contract
•
implied contract
•
unenforceable contract
•
quasi-contract
Different Types of Contracts
17
Cynthia orders 100 blue shirts for her screenprinting business from Juan, a shirt supplier. When Cynthia receives the shirts, she discovers that Juan has sent her a batch of pink shirts. She rightfully rejects delivery, and the shirts are shipped back to Juan. Because of the delay in receiving the blue shirts, Cynthia is unable to fill a large order and loses $500 in sales.
What remedy does Cynthia have in this scenario?
•
Cynthia must fulfill the contract by paying for the blue shirts when they finally arrive, but she is entitled to recover damages relating to her business losses in the meantime.
•
Cynthia may either replevy the shirts or sue Juan for specific performance.
•
Cynthia can cancel the contract with Juan and recover in full what she paid for the shirts, as well as sue for damages since she suffered a loss directly related to the non-delivery.
•
Since she rejected the delivery, Cynthia has no recourse in this scenario except for a refund of the price she paid for the shirts.
Buyer’s Remedies Under the Uniform Commercial Code
18
The Uniform Commercial Code (UCC) is the primary source of law for contracts regarding __________.
•
the sale of goods, services, and real estate
•
the sale or lease of goods only
•
the sale of goods and real estate
•
the sale of goods and services
Sources of Contract Law
19
A man riding a roller coaster is severely injured when the car he’s riding in jumps off the track. He sues the amusement park for negligence.
Assuming it is true, which of the following would represent a strong defense against the negligence claim?
•
The man snuck into the amusement park rather than paying for admission.
•
The man has seen roller coasters before, and knowingly and voluntarily assumed the risk of participating in a dangerous activity.
•
The man undid his seatbelt after the roller coaster started moving.
•
The amusement park has never had an accident like this before.
Negligent Torts: Damages and Defenses
20
Andy is driving a 20-year-old boat that he borrowed from a friend. While he’s on the water, the steering system fails and the boat crashes. Subsequent investigation shows that the steering system failed as a result of corrosion. Andy sues the boat manufacturer for negligence.
How strong is his negligence case against the product manufacturer?
•
Strong, because proximate cause between the corroded steering system and the crash is easy to establish.
•
Weak, because he does not have privity of contract, since he was borrowing his friend’s boat.
•
Weak, unless he can show that the corrosion was the result of a design defect rather than normal wear and tear on a 20-year-old boat.
•
Strong, because there is no evidence that Andy’s own actions contributed to the damages.
Negligent Products Liability
21
Which of the following scenarios would likely result in an order for specific performance or an injunction, rather than a monetary award?
•
Uma buys a copy of a photograph she loves from a local home decor shop. When she has the photograph framed, the framing company damages it and refuses to pay for its restoration. Uma sues the framing company for breach of contract.
•
Martina pays Omar $250 to deliver a cord of firewood to her home. Omar never delivers the wood, and Martina eventually sues him for breach of contract.
•
Cheryl has all of her employees sign non-compete agreements that extend for two years after their employment ends. Cheryl’s former employee, Jen, starts working for a competitor three months after she stops working for Cheryl. Cheryl files a suit against Jen for breach of contract.
•
Darien buys a new car from a dealership that is supposed to come with leather seating. When he takes possession of the car, it has regular fabric seating. Darien sues the car dealership for breach of contract.
Equitable Remedies: Specific Performance and Injunction
Which of the following statements about torts and crimes is true?
•
A criminal act is immoral, while a tortious act is not.
•
Tort law is more concerned than criminal law about the reasons for a defendant’s actions.
•
An act may either be a crime or a tort, but not both.
•
Torts carry a legal remedy of damages, while crimes do not.
Which of the following is an example of a voidable contract?
•
A 28-year-old adult forms a written contract with an able-bodied and competent 17-year-old neighbor to cut her lawn for $200 per week.
•
A 21-year-old adult forms a written contract with an able-bodied and competent adult neighbor to clean his house for $1 per month.
•
A 52-year-old forms an oral contract with an able-bodied and competent adult neighbor to paint his deck for $1,000.
•
A 21-year-old forms a contract with an able-bodied and competent 30-year-old neighbor to drive her to work all year in exchange for gas money.
In which scenario would strict liability most likely apply?
•
An explosion at a chemical plant injures several workers.
•
The ceiling of a city hall crumbles and injures a few employees.
•
A deck collapses at a restaurant, injuring two diners.
•
A fire at a grocery store injures several customers.
Select the example that is inconsistent with the provisions of the UCC for contract remedies for a seller’s breach of contract.
•
In its sales contract, a jewelry maker gives buyers a maximum of 18 months to raise any concerns relating to breach of contract.
•
The sales contract for machine parts excludes responsibility for any loss of business that may result from a delivery delay.
•
The sales contract for a company that sells rare antiques includes a liquidated damages clause in the event of a breach of contract that the courts have deemed reasonable.
•
An auto manufacturer’s sales contract reduces the statute of limitations for breach of contract claims to nine months.
Which of the following statements regarding the enforceability of contracts involving minors is true?
•
Minors may never enter into legally enforceable contracts.
•
All contracts involving minors are unenforceable.
•
Contracts for necessities (such as food or shelter) involving a minor as a party are enforceable.
•
Provided all other conditions for enforceability are met, a contract may not be voided simply because one party is a minor.
A store employee drops a box of oranges while stocking the produce section, and oranges roll all over the floor. A customer steps on an orange and falls, injuring her arm. The customer sues the store employee for negligence.
Assuming it is true, which of the following would represent a strong defense against the negligence claim?
•
The customer ignored a barrier that the employee had set up around the produce section of the store.
•
The customer has mounting debts and needs money to pay them off.
•
The employee had already partially cleaned up the oranges when the customer fell.
•
The customer was talking to her friend when the accident happened.
A drug manufacturer of an oral contraceptive is sued for strict product liability when Alana suffered severe side effects from the drug. The manufacturer defends against the claim on the basis of assumption of risk and proves that both the prescribing physician and Alana knew of the potential side effects, and that Alana continued to use the drug after she experienced those side effects.
How strong is the manufacturer’s defense against Alana’s claim?
•
Strong, because the utility of oral contraceptives outweighs their known side effects.
•
Strong, because Alana knew of the potential for side effects, actually suffered these side effects, and decided to continue to use the drug anyway.
•
The strength of the defense cannot be determined without knowing if the drug came with a written warning about potential side effects.
•
Weak, because assumption of risk is not a recognized defense to strict product liability claims involving pharmaceuticals.
Select the true statement about the Restatement of the Law of Contracts.
•
It is the primary source of law for contract cases involving the sale of goods.
•
It is a valuable resource for judges to consult, but it is not formal law.
•
It must be renewed by Congress every ten years.
•
It completely overturned the contract law that had developed in the common law courtroom.
A technician from a utility company walks onto a homeowner’s property to read the electrical meter and tramples some flowers that grow under the meter.
Which type of intentional tort does this represent?
•
Invasion of privacy
•
This action does not rise to the level of an intentional tort.
•
Trespassing
•
Misrepresentation
Status NEW Posted 26 Oct 2020 12:10 AM My Price 20.00
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